Ep. 87: Surplus Lines – The Power Player in the Market
Jerry Sullivan is the Chairman of G. J. Sullivan Co. Reinsurance, the focus company for the Sullivan Group of companies. He has over 35 years of expertise in the insurance industry, spanning the regulatory, investment, company, claims, program manager, reinsurance and wholesale aspects of the business. Decades after establishing the company that serves as the core of The Sullivan Group and alongside various partners, he continues to lead the group in developing new companies and approaches centered on insurance.
Jerry joins us today to demystify surplus lines. He explains its strengths and capabilities, providing significant background information on how the system came to be. He discusses the areas in which surplus lines work, where the concept could use some improvement, and explains specific rules governing regulations for surplus lines carriers domiciled in and outside of the United States. He also emphasizes why it is important to take all of these concepts and present them in a manner that uses minimal jargon and is tailored for the growing audience of newcomers in the industry.
“In dealing in the world of risk and intangibles, it’s easy to confuse people who don’t understand risk. There are some people who choose to take advantage of that reality and that’s why regulation is there.” - Jerry Sullivan
What you'll learn:
- How Jerry got started in the insurance business.
- How he played a critical role in resolving a major statewide insurance controversy — and ultimately, revising state policy.
- The basic concept of the regulatory perspective of the United States.
- The misconceptions about surplus lines, and the truth behind them.
- Guidelines and financial requirements for surplus lines across states.
- The vetting process for surplus lines carriers.
- What it means for a surplus lines carrier to be “eligible.”
- What an export list is, and why it’s needed.
- The importance of avoiding jargon and discussing advanced industry concepts in a more relatable manner.
- How Surplus Lines is a much more involved business than the standard retail approach.
- Why different risks entail different approaches and therefore merit closer examination.
- How insurance associations benefit their members.
- How he and his company are focusing on new, emerging risks.
- The impact of emerging technologies such as blockchain, etc. on the surplus lines operations.
- How the concept of “disruptive technology” is a serious mistake that is often heard when getting into these new technologies.
- His advice for new players in the industry.
- Why customer focus is not a new thing at all.
- There are two kinds of guidelines for surplus lines in the United States: Standard state regulation for carriers domiciled in the United States, and oversight from either the National Association of Insurance Commissioners or the Department of Insurance for carriers domiciled outside the United States.
- Insurance organizations are crucial in keeping insurance businesses working properly, and in resolving their major problems.
- Better processing of information is the heart of understanding the ability to better take risks.
- Working in the claims department, even for a brief time, is a truly educational experience.
- At the end of the day, it’s about making sure that the risk taker’s problems are being taken care of in an effective manner.
- Global Pirates: Fraud in the Offshore Insurance Industry by Robert Tilman
This episode was brought to you by
Insurance Licensing Services of America (ILSA), America’s premier regulatory compliance experts. To learn more visit ILSAinc.com.